Homework Answers
The appropriate risk-return is 10.56 which is less than 12% hence the project should not be accepted.
The correct answer is c)
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QUESTION 3 ike can purchase a donut stand for $300,000. Mike thinks the donut stand will...
The production department is proposing the purchase of an automatic insertion machine. It has identified 3...
The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and has asked the accountant to analyze them to determine the best cash payback. Machine A Machine B Machine C Annual cash flow $40,000 $50,000 $75,000 Average investment $300,000 $250,000 $500,000 a.Machine C b.Machine A c.Machine B d.All of these choices are equal.
Question 12 Consider the following two mutually exclusive projects: Year Cash Flow(A) -$300,000 20,000 50,000 50,000...
Question 12 Consider the following two mutually exclusive projects: Year Cash Flow(A) -$300,000 20,000 50,000 50,000 390,000 Cash Flow(B) -$40,000 19,000 12,000 18,000 10,500 Whichever project you choose, if any, you require a 15 percent return on your investment. a) If you apply the NPV criterion, which investment will you choose? Why? b) If you apply the IRR criterion, which investment will you choose? Why? c) Based on your answers in (a) through (b), which project will you finally choose?...
Exercise 12-3 Internal Rate of Return [LO12-3] Wendell’s Donut Shoppe is investigating the purchase of a...
Exercise 12-3 Internal Rate of Return [LO12-3] Wendell’s Donut Shoppe is investigating the purchase of a new $50,100 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,900 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,600 dozen more donuts each year. The company realizes a contribution margin of $1.60 per dozen...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent? Year Project A Project B -$80,000 -$80,000 31,000 31,000 0 31,000 110,000 A. accept project A as it always has the higher NPV B. accept project B as it always has the higher NPV C. accept A at 8.5 percent and B at 13 percent D. accept...
please step by step, thank you very much 3. The Miser's Choice You are making a...
please step by step, thank you
very much
3. The Miser's Choice You are making a choice on behalf of an investor who has $100 to spend. They ask you to choose one of the three potential investment projects: A, B, or C. Each project requires an upfront investment (CF0) and delivers a payoff in one year (CF1) with 100% certainty. The cash flows for each project are listed below: Project A Project B Project C CFo -100 -50 -40...
can someone please read my risk and returns and let me know if it makes sense....
can someone please read my risk and returns and let me
know if it makes sense. if it does not could you explain please.
Thanks
Speech Accessibility Tracking Compare Proofing Language Comments Changes ink Resume Investing In a new factory Investing in a factory building is always one decision corporations will have to make and it is usually based off why a new factory is needed and if it will be profitable for a company to expand. McCormick and Company...
when k and g are expressed as decimal fractions (e.g., .12 and .04) What should Rainbow do? 2. Suppose you own a concession stand that sells hot dogs, peanuts, do not expect it to be renew...
when k and g are expressed as decimal fractions (e.g., .12 and .04) What should Rainbow do? 2. Suppose you own a concession stand that sells hot dogs, peanuts, do not expect it to be renewed. Long lines limit sales and profits. You have popcom, and aer at a ball park. You have 3 years left on the contract with the ball park, and developed four different proposals to reduce the lines and increase profts: The first proposal is to...
please answer with excel ONLY + formulas used DDD is debating the purchase of a new...
please answer with excel ONLY + formulas used
DDD is debating the purchase of a new digital scanner. The scanner they acquired 3 years ago for $500,000 is worth $150,000 today and will have a salvage value of $45,000 after 7 more years. The current scanner generates revenues of $300,000 per year. The costs of operating the scanner are $180,000 per year. The company currently has $50,000 invested in operating net working capital. The new scanner will cost $760,000. The...
answer using excel please DDD is debating the purchase of a new digital scanner. The scanner...
answer using excel please
DDD is debating the purchase of a new digital scanner. The scanner they acquired 3 years ago for $500,000 is worth $150,000 today, and will have a salvage value of $45,000 after 7 more years. The current scanner generates revenues of $300,000 per year. The costs of operating the scanner are $180,000 per year. The company currently has $50,000 invested in operating net working capital. The new scanner will cost $760,000. The new scanner will generate...
Solve the following questions using a financial calculator. Submit your answers in Excel. Show calculator inputs...
Solve the following questions using a financial calculator. Submit your answers in Excel. Show calculator inputs (ie. N, PV, etc.) to get partial credit. 1. How much would you pay for the right to receive $12,000 at the end of 15 years if you can earn a 15% return on a real estate investment with similar risk? 2. What constant amount invested at the end of each year at a 10% annual interest rate will be worth $20,000 at the...
Question 12 Consider the following two mutually exclusive projects: Year Cash Flow(A) -$300,000 20,000 50,000 50,000 390,000 Cash Flow(B) -$40,000 19,000 12,000 18,000 10,500 Whichever project you choose, if any, you require a 15 percent return on your investment. a) If you apply the NPV criterion, which investment will you choose? Why? b) If you apply the IRR criterion, which investment will you choose? Why? c) Based on your answers in (a) through (b), which project will you finally choose?...
3. You are considering two mutually exclusive projects with the following cash flows. Which project(s) should you accept if the discount rate is 8.5 percent? What if the discount rate is 13 percent? Year Project A Project B -$80,000 -$80,000 31,000 31,000 0 31,000 110,000 A. accept project A as it always has the higher NPV B. accept project B as it always has the higher NPV C. accept A at 8.5 percent and B at 13 percent D. accept...
please step by step, thank you
very much
3. The Miser's Choice You are making a choice on behalf of an investor who has $100 to spend. They ask you to choose one of the three potential investment projects: A, B, or C. Each project requires an upfront investment (CF0) and delivers a payoff in one year (CF1) with 100% certainty. The cash flows for each project are listed below: Project A Project B Project C CFo -100 -50 -40...
can someone please read my risk and returns and let me
know if it makes sense. if it does not could you explain please.
Thanks
Speech Accessibility Tracking Compare Proofing Language Comments Changes ink Resume Investing In a new factory Investing in a factory building is always one decision corporations will have to make and it is usually based off why a new factory is needed and if it will be profitable for a company to expand. McCormick and Company...
when k and g are expressed as decimal fractions (e.g., .12 and .04) What should Rainbow do? 2. Suppose you own a concession stand that sells hot dogs, peanuts, do not expect it to be renewed. Long lines limit sales and profits. You have popcom, and aer at a ball park. You have 3 years left on the contract with the ball park, and developed four different proposals to reduce the lines and increase profts: The first proposal is to...
please answer with excel ONLY + formulas used
DDD is debating the purchase of a new digital scanner. The scanner they acquired 3 years ago for $500,000 is worth $150,000 today and will have a salvage value of $45,000 after 7 more years. The current scanner generates revenues of $300,000 per year. The costs of operating the scanner are $180,000 per year. The company currently has $50,000 invested in operating net working capital. The new scanner will cost $760,000. The...
answer using excel please
DDD is debating the purchase of a new digital scanner. The scanner they acquired 3 years ago for $500,000 is worth $150,000 today, and will have a salvage value of $45,000 after 7 more years. The current scanner generates revenues of $300,000 per year. The costs of operating the scanner are $180,000 per year. The company currently has $50,000 invested in operating net working capital. The new scanner will cost $760,000. The new scanner will generate...
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